Iran-Israel War: IDF hits Iranian refineries, Tehran retaliates | 10 key developments

As the war between Iran and the coalition of the United States of America and Israel enters second week, the wider conflict in the Gulf has escalated to dangerous new precedents. 

Most recently, the US-Israeli coalition expanded the range of their attacks beyond military and nuclear sites to target Iran’s oil production and storage facilities for the first time since the start of the war.

Let’s take a look at 10 key updates from the region to bring you up to speed with the latest developments: 

1. The primary targets: Israeli fighter jets targeted the Tondgouyan Oil Refinery in Shahr Rey (Tehran Province) and the Shahran Oil Refinery in Tehran city. As two of Iran’s most productive units, their disruption has effectively severed the refined fuel supply to Tehran. 

Concurrently, the Shahran Oil Refinery in Northwest Tehran was struck for the second time in a year, sending pillars of black smoke across the Iranian skyline.

Tehran's largest oil depot up in flames 👇

A reminder that China imports 15% of its oil from Iran. No longer.pic.twitter.com/bGdxWSECNk

— Dr. Eli David (@DrEliDavid) March 7, 2026

2. Strikes in Alborz and Karaj: The strikes from Israel weren’t limited to Iranian refineries as during their air raids, Israeli defense forces systematically dismantled Iran’s wider oil infrastructure by targeting storage facilities. Four major oil storage facilities in Karaj and Alborz province were neutralized by the IDF on Saturday. 

According to a statement given by the CEO of the National Iranian Oil Products Distribution Company (NIOPDC), Keramat Veyskarami to local media outlets, these depots were the primary distribution nodes for Northern Iran.

3. The ‘five sites’ report: While Tehran initially downplayed the scale of the “overnight Saturday” strikes, the National Iranian Oil Products Distribution Company (NIOPDC) has since confirmed a coordinated assault on five critical nodes of the domestic energy grid. These weren’t random hits; they were surgical strikes on the “final mile” of fuel infrastructure in Iran.

The five key sites targeted include Tehran Petroleum Products Transport Center, Fardis Oil Depot (Karaj), Kouhak (Kuhak) Oil Depot (West Tehran), Shahr-e Rey Depot (South Tehran) and Shahran Oil Depot (Northwest Tehran)

4. IDF’s justification: The Israeli Defense Forces (IDF) stated that these energy complexes were being used by the IRGC (Islamic Revolutionary Guard Corps) to fuel military operations. “The Iranian terror regime makes direct use of these tanks to operate military infrastructure,” the IDF noted in a statement.

5. Fuel crisis in Tehran: Following the strikes, fuel distribution in the capital was “temporarily interrupted.” IRNA (State Media) reported that long queues formed at petrol pumps as the Governor of Tehran, Mohammad Sadegh Motamedian, admitted to “damage to the fuel supply network.”

The effect of Israel’s strikes became more pronounced after the attack on Tehran Petroleum Products Transport Center. This strike was particularly devastating as it targeted the vehicles and personnel responsible for moving fuel, rather than just the static tanks.

6. Tehran’s retaliation – Haifa Refinery: In a swift “tit-for-tat” response, the IRGC claimed to have targeted Israel’s Haifa oil refinery. While Israeli air defenses (Iron Dome and David’s Sling) intercepted the bulk of the barrage, the intent signaled a shift toward total energy warfare.

As per reports from Al Jazzera, Iran’s consistent attempts to attack Haifa, a city with high chemical and fuel storage density has also triggered evacuations in Northern Israel.

7 Expanding the conflict to the GCC: Tehran’s retaliation spilled over to regional US allies. Iranian-linked drones targeted Saudi Aramco’s Shaybah oil field (1mn b/d capacity) and the Ras Tanura refinery. Minor damage was also reported at Bahrain’s Sitra refinery and storage facilities at the Port of Fujairah (UAE) and Port of Duqm (Oman). 

8. Different angles to force regime change? According to a report published by the Institute for the Study of War (ISW) in affiliation with American think tanks, this development marks a significant escalation in “Operation Epic Fury,” aimed at dismantling the regime by targeting the economic heart of their empire.

9. The Hormuz Threat: While the IRGC has not “physically” closed the Strait of Hormuz, the threat of kinetic strikes on tankers has created a de facto blockade. Multiple tankers, including a UAE-flagged tugboat, have already been damaged or sunk in the surrounding waters since the escalation began.

Shipping insurance premiums have surged by 400%, and Kuwait’s KPC has already declared reduction in crude output and exports as the shipping lanes become too high-risk for VLCCs (Very Large Crude Carriers).

10. Market & leadership fallout: The strikes follow the reported assassination of Supreme Leader Ali Khamenei earlier in the week. With the leadership in flux, Brent crude prices have surged in a near unprecedented manner over the past week, with analysts at Barclays warning that prices could breach the $200 per barrel mark if the Hormuz blockade is enforced.

Multiple trade researchers and analysts at institutes like Barclays and GTRI have warned that if the war continues to escalate in the same fashion as what we have observed over the past week, then it could produce a strong macroeconomic shock for several countries across the world.